ENGROSSED
H. B. 4696
(By Delegates Michael, Mezzatesta, Leach, Jenkins,
Compton, Facemyer and Clements)
(Originating in the Committee on Finance)
[March 3, 1998]

A BILL to amend and reenact section eighteen, article twenty-two, chapter twenty-nine of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to amend and reenact section thirty-three, article three, chapter thirty-three of said code, all relating to the surcharge on fire and casualty insurance policies; providing that the entire proceeds of the surcharge go to volunteer fire departments; providing criteria for distribution of funds to needy fire departments; creating the catastrophic illness fund; specifying expenditures therefrom upon appropriation by the Legislature; funding the the catastrophic illness fund; creating the catastrophic illness commission; providing for appointment of members and expenses of members; limiting expenses; providing time limits for appointments to be made to the board and setting forth the time for the first meeting of the commission; providing that six million dollars of the lottery proceeds remaining after all specified bond obligations have been met go to teachers retirement reserve fund; and specifying certain required application information.

Be it enacted by the Legislature of West Virginia:
That section eighteen, article twenty-two, chapter twenty-nine of the code of West Virginia, one thousand nine hundred thirty-one, as amended , be amended and reenacted; and that section thirty- three, article three, chapter thirty-three of said code be amended and reenacted, all to read as follows:
ARTICLE 22. STATE LOTTERY ACT.
§29-22-18. State lottery fund; appropriations and deposits; not part of general revenue; no transfer of state funds after initial appropriation; use and repayment of initial appropriation; allocation of fund for prizes, net profit and expenses; surplus; state lottery education fund; state lottery senior citizens fund; allocation and appropriation of net profits.
(a) There is hereby continued a special revenue fund in the state treasury which shall be designated and known as the "state lottery fund". The fund shall consist of all appropriations to the fund and all interest earned from investment of the fund and any gifts, grants or contributions received by the fund. All revenues received from the sale of lottery tickets, materials and games shall be deposited with the state treasurer and placed into the "state lottery fund". The revenue shall be disbursed in the manner provided in this section for the purposes stated in this section and shall not be treated by the auditor and treasurer as part of the general revenue of the state.
(b) No appropriation, loan or other transfer of state funds may be made to the commission or lottery fund after the initial appropriation.
(c) A minimum annual average of forty-five percent of the gross amount received from each lottery shall be allocated and disbursed as prizes.
(d) Not more than fifteen percent of the gross amount received from each lottery shall be allocated to and may be disbursed as necessary for fund operation and administration expenses.
(e) The excess of the aggregate of the gross amount received from all lotteries over the sum of the amounts allocated by subsections (c) and (d) of this section shall be allocated as net profit. In the event that the percentage allotted for operations and administration generates a surplus, the surplus shall be allowed to accumulate to an amount not to exceed two hundred fifty thousand dollars. On a monthly basis, the director shall report to the joint committee on government and finance of the Legislature any surplus in excess of two hundred fifty thousand dollars and remit to the state treasurer the entire amount of those surplus funds in excess of two hundred fifty thousand dollars which shall be allocated as net profit.
(f) After first satisfying the requirements for funds dedicated to the school building debt service fund in subsection (h) of this section to retire the ten-year bonds authorized to be issued pursuant to section eight, article nine-d, chapter eighteen of this code, and then satisfying the requirements for funds dedicated to the education, arts, sciences and tourism debt service fund in subsection (i) of this section to retire the bonds authorized to be issued pursuant to section eleven-a, article six, chapter five of this code, six million dollars of the funds remaining after satisfying the above requirements shall be deposited to the teachers retirement reserve fund, after which the Legislature shall annually appropriate all of the remaining amounts allocated as net profits in subsection (e) of this section, in such proportions as it considers beneficial to the citizens of this state, to: (1) The lottery education fund created in subsection (g) of this section; (2) the school construction fund created in section six, article nine-d, chapter eighteen of this code; (3) the lottery senior citizens fund created in subsection (j) of this section; and (4) the division of natural resources created in section four, article five, chapter twenty of this code and the West Virginia development office as created in section one, article two, chapter five-b of this code, in accordance with subsection (k) of this section. No transfer to any account other than the school building debt service account and the education, arts, sciences and tourism debt service fund may be made in any period of time in which a default exists in respect to debt service on bonds issued by the school building authority and the state building commission which are secured by lottery proceeds. No additional transfer shall be made to any account other than the school building debt service account and the education, arts, sciences and tourism debt service fund when net profits for the preceding twelve months are not at least equal to one hundred fifty percent of debt service on bonds issued by the school building authority and the state building commission which are secured by net profits.
(g) There is hereby continued a special revenue fund in the state treasury which shall be designated and known as the "lottery education fund". The fund shall consist of the amounts allocated pursuant to subsection (f) of this section, which shall be deposited into the lottery education fund by the state treasurer. The lottery education fund shall also consist of all interest earned from investment of the lottery education fund and any other appropriations, gifts, grants, contributions or moneys received by the lottery education fund from any source. The revenues received or earned by the lottery education fund shall be disbursed in the manner provided below and shall not be treated by the auditor and treasurer as part of the general revenue of the state. Annually, the Legislature shall appropriate the revenues received or earned by the lottery education fund to the state system of public and higher education for such educational programs as it considers beneficial to the citizens of this state.
(h) On or before the twenty-eighth day of each month through the twentieth day of June, two thousand five, the lottery director shall allocate to the school building debt service fund created pursuant to the provisions of section six, article nine-d, chapter eighteen of this code, as a first priority from the net profits of the lottery for the preceding month, an amount equal to one tenth of the projected annual principal, interest and coverage ratio requirements on any and all revenue bonds and refunding bonds issued, or to be issued, on or after the first day of April, one thousand nine hundred ninety-four, as certified to the lottery director in accordance with the provisions of section six, article nine-d, chapter eighteen of this code. In no event shall the monthly amount allocated exceed one million eight hundred thousand dollars, nor shall the total allocation of the net profits to be paid into the school building debt service fund, as provided in this section, in any fiscal year exceed the lesser of the principal and interest requirements certified to the lottery director or eighteen million dollars. In the event there are insufficient funds available in any month to transfer the amount required to be transferred pursuant to this subsection to the school debt service fund, the deficiency shall be added to the amount transferred in the next succeeding month in which revenues are available to transfer the deficiency. A lien on the proceeds of the state lottery fund up to a maximum amount equal to the projected annual principal, interest and coverage ratio requirements, not to exceed twenty-seven million dollars annually, may be granted by the school building authority in favor of the bonds it issues which are secured by the net lottery profits.
(i) Beginning on or before the twenty-eighth day of July, one thousand nine hundred ninety-six, and continuing on or before the twenty-eighth day of each succeeding month thereafter through the twenty-eighth day of June, two thousand twenty-one, the lottery director shall allocate to the education, arts, sciences and tourism debt service fund created pursuant to the provisions of section eleven-a, article six, chapter five of this code, as a second priority from the net profits of the lottery for the preceding month, an amount equal to one tenth of the projected annual principal, interest and coverage ratio requirements on any and all revenue bonds and refunding bonds issued, or to be issued, on or after the first day of April, one thousand nine hundred ninety-six, as certified to the lottery director in accordance with the provisions of that section. In no event shall the monthly amount allocated exceed one million dollars nor shall the total allocation paid into the education, arts, sciences and tourism debt service fund, as provided in this section, in any fiscal year exceed the lesser of the principal and interest requirements certified to the lottery director or ten million dollars. In the event there are insufficient funds available in any month to transfer the amount required pursuant to this subsection to the education, arts, sciences and tourism debt service fund, the deficiency shall be added to the amount transferred in the next succeeding month in which revenues are available to transfer the deficiency. A second-in-priority lien on the proceeds of the state lottery fund up to a maximum amount equal to the projected annual principal, interest and coverage ratio requirements, not to exceed fifteen million dollars annually, may be granted by the state building commission in favor of the bonds it issues which are secured by the net lottery profits.
(j) There is hereby continued a special revenue fund in the state treasury which shall be designated and known as the "lottery senior citizens fund". The fund shall consist of the amounts allocated pursuant to subsection (f) of this section, which shall be deposited into the lottery senior citizens fund by the state treasurer. The lottery senior citizens fund shall also consist of all interest earned from investment of the lottery senior citizens fund and any other appropriations, gifts, grants, contributions or moneys received by the lottery senior citizens fund from any source. The revenues received or earned by the lottery senior citizens fund shall be disbursed in the manner provided below and shall not be treated by the auditor or treasurer as part of the general revenue of the state. Annually, the Legislature shall appropriate the revenues received or earned by the lottery senior citizens fund to such senior citizens medical care and other programs as it considers beneficial to the citizens of this state.
(k) The division of natural resources and the West Virginia development office, as appropriated by the Legislature, may use the amounts allocated to it pursuant to subsection (f) of this section for one or more of the following purposes: (1) The payment of any or all of the costs incurred in the development, construction, reconstruction, maintenance or repair of any project or recreational facility, as these terms are defined in section four, article five, chapter twenty of this code, pursuant to the authority granted to it under article five, chapter twenty of this code; (2) the payment, funding or refunding of the principal of, interest on or redemption premiums on any bonds, security interests or notes issued by the parks and recreation section of the division of natural resources under article five, chapter twenty of this code; or (3) the payment of any advertising and marketing expenses for the promotion and development of tourism or any tourist facility or attraction in this state.
throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.

ARTICLE 3. LICENSING, FEES AND TAXATION OF INSURERS.

§33-3-33. Surcharge on fire and casualty insurance policies to benefit volunteer and part volunteer fire departments; special fund created; allocation of proceeds; effective date.
(a) For the purpose of providing additional revenue for volunteer and part volunteer fire departments~~, certain retired teachers and the teachers retirement reserve fund,~~ and for the catastrophic injury fund there is hereby ~~authorized and imposed~~ continued on and after the first day of July, ~~one thousand nine hundred ninety-two~~ one thousand nine hundred ninety-eight, on the policyholder of any fire and casualty insurance policy, a policy surcharge equal to one percent of gross direct premium paid by the policyholder for each such policy. For purposes of this section, casualty insurance shall not include insurance on the life of a debtor pursuant to or in connection with a specific loan or other credit transaction or insurance on a debtor to provide indemnity for payments becoming due on a specific loan or other credit transaction while the debtor is disabled as defined in the policy. The policy surcharge shall not be subject to premium taxes, agent commissions or any other assessment against premiums.
The policy surcharge shall be collected and remitted by the insurer to the commissioner on forms prescribed by the commissioner on a quarterly basis and are due on the twenty-fifth day of the month succeeding the end of the quarter in which they are collected except for the fourth quarter for which the surcharge shall be due and payable on or before the first day of March of the succeeding year. All forms required by the commissioner shall be submitted under the oath of the president and secretary of the insurer.
Any insurer failing or refusing to collect and remit to the commissioner any policy surcharge and whose surcharge payments are not postmarked by the due dates for quarterly filing is liable for a civil penalty of up to one hundred dollars for each day of delinquency, to be assessed by the commissioner. The commissioner may suspend the insurer until all surcharge payments and penalties, should any penalty be imposed, are remitted in full to the commissioner.
~~One half of all~~ All money from the policy surcharge shall be collected by the commissioner who shall disburse the money received from the surcharge into a special account in the state treasury, designated the "fire protection fund". The net proceeds of this portion of the tax after appropriation by the Legislature shall be distributed in accordance with the provisions of subsection (c) of this section. The remaining fifty percent of the moneys collected shall be transferred to the teachers retirement system to be disbursed according to the provisions of sections twenty-six-j, twenty-six-k and twenty-six-l, article seven-a, chapter eighteen of this code. Any balance remaining after the disbursements authorized by this subdivision have been paid shall be paid by the teachers retirement system into the teachers retirement system reserve fund. The first one million dollars of the proceeds from this tax received after the thirtieth day of June, one thousand nine hundred ninety-eight, shall be placed into a special account in the state treasury, designated the "James 'Tiger' Morton Catastrophic Illness Fund". Thereafter, up to one million dollars shall be placed annually in the "James 'Tiger' Morton Catastrophic Illness Fund" : Provided, That following the thirtieth day of June, one thousand nine hundred ninety-eight, only the amount required to bring the balance in said fund up to one million dollars may be deposited in said fund: Provided however, That nothing contained herein may be construed to prohibit the "James 'Tiger' Morton Catastrophic Illness Fund" from receiving gifts and donations. Moneys in this fund shall be distributed in accordance with the provisions of subsection (d) of this section.
(b) The moneys, and the interest earned thereon, in the fire protection fund shall be allocated among and distributed quarterly to all volunteer and part volunteer fire departments by the state treasurer. Before each distribution date, the state fire marshal shall report to the state treasurer the names and addresses of all volunteer and part volunteer fire companies and departments within the state which meet the eligibility requirements established in section eight-a, article fifteen, chapter eight of this code.
The payments hereinabove provided shall be paid on the first day of the months of January, April, July and October of one thousand nine hundred ninety-eight and each year thereafter.
(c) Each volunteer fire company or department shall receive on an equal share basis one half of the revenues ~~allocated for volunteer and part volunteer fire companies and departments~~ under subdivision (1), subsection (a) of this section. The remaining one half of the revenues shall be distributed to needy volunteer fire departments in accordance with the following criteria:
(1) The volunteer or part volunteer fire company or department meets or is striving to meet the thirteen requirements as established by the state fire commission dealing with the recognition of fire departments;
(2) The geographical location of the volunteer or part volunteer fire company or department is such that it serves a small population which precludes the volunteer or part volunteer fire company or department from raising needed funds;
The state fire commission may develop other criteria for the distribution of funds to needy volunteer or part volunteer fire companies or departments.
Any volunteer or part volunteer fire company or department applying to the state fire commission for funds shall, at a minimum, submit its current operating budget and its budgets for the prior two years next preceding the current budget submitted; submit an equipment inventory list setting forth all equipment of the volunteer or part volunteer fire company or department, the date the equipment was acquired and the condition of the equipment; and, submit a statement of need which justifies the request for funds. The state fire commission may develop further information requirements for those volunteer or part volunteer fire company or department making application for the funds: Provided, That the state fire commission propose a legislative rule in accordance with the provisions of chapter twenty-nine-a of this code setting forth the criteria for the distribution of funds to needy volunteer or part volunteer fire companies or departments.
(d) The allocation, distribution and use of revenues provided in the fire protection fund are subject to the provisions of sections eight-a and eight-b, article fifteen, chapter eight of this code and are subject to appropriation by the Legislature.
(e) The allocation, distribution and use of revenues provided in the "James 'Tiger' Morton Catastrophic Illness Fund" are subject to the following provisions. Upon appropriation by the legislature, expenditures from the "James 'Tiger' Morton Catastrophic Illness Fund" may be made to families or persons suffering a catastrophic illness, as determined by the catastrophic illness commission. The catastrophic illness commission shall be composed of the ombudsman from the department of health and human resources, a medical doctor licensed to practice medicine in this state, an attorney licensed to practice law in this state, two members from the public at large who are active in community affairs, a nurse licensed to practice in this state, and a social worker licensed in this state. The governor shall appoint the members to the catastrophic illness commission no later than the thirty-first day of August, one thousand nine hundred ninety-eight, and the commission shall hold its first meeting no later than the last day of September, one thousand nine hundred ninety-eight. Members of the catastrophic illness commission shall receive expenses only, not to exceed fifteen thousand dollars in the aggregate per year, and shall meet at least quarterly. Special meetings may be called. The purpose of the catastrophic illness commission is to make an annual recommendation to the Legislature regarding appropriations from the catastrophic illness fund. This recommendation shall be made to the legislature no later than the second Wednesday of January, commencing with the second Wednesday of January, one thousand nine hundred ninety-nine.